Friday, December 19, 2008
Budish and Batchelder at The City Club, 1/9/09
Phone: toll-free, 888-223-6786; locally, 216-621-0082
More Cuts in This Budget - What About Next Budget?
We are hearing that we must all share in the sacrifices that are needed to get us through this. The question is, how do we do this. Hopefully, the $640 million in adjustments will get us through this budget. But as we look at next budget’s estimated $7.3 billion deficit at flat funding, we will need to look at all options and make the choices that do the last harm to the economy and Ohio’s future. Options include the Rainy Day Fund, temporary tax increases, examination of this decade’s tax reforms, and budget cuts.
When weighing whether to decrease government spending or raise revenues, we should appreciate government as a major part of our economy - every dollar cut is a loss of income to someone. It is particularly hard to cut the services that make up our safety net when more and more families are falling on hard times. Economists, including Barack Obama’s new budget director, Peter Orszag, recommend temporary tax increases for high income tax brackets over general tax increases or budget cuts. Ohio has increased income tax rates for high income brackets in past recessions, in both 1982 and 1992, and added a temporary sales tax increase during the last recession. Even with a federal economic recovery package, there will be tough choices, and we’ll have to consider all options.
Unique Look at Cuyahoga's Workforce
Labor Force Participation
Median Earned Income
Workforce Characteristics of Householders
Persons with Work Disabilities
Means of Transportation and Travel Time to Work
Persons Ages 16 and Over Attending School
Characteristics of Persons Looking for Work
Health Status and Employment
Find the full report at www.CommunitySolutions.com.
Wednesday, December 03, 2008
This recession needs many solutions
Of course, Ohio is not alone in its budget situation. 43 states face budget shortfalls. According to the National Conference of State Legislatures (NCSL), in FY 2009, 20 states have cut a total of $7.6 billion, and 30 states have shortfalls of another $30 billion.
President-elect Obama met with current and in-coming governors yesterday, and it is expected that a stimulus plan will come shortly after Obama takes office and will include aid to states. Leaders of the National Governors Association (NGA) and NCSL made recommendations on how to strengthen our economy, including state aid to avoid program cuts in countercyclical and safety net programs and immediate infrastructure investments that create jobs. Ohio is using the latter strategy with its job stimulus plan which offers effective investments which can be rolled out relatively quickly.
The aid to states would potentially be quicker and more substantial than it was in the last recession. As proposed by NGA, most of the state aid would fund infrastructure projects and some funds would temporarily increase the federal share of Medicaid. States would welcome this stimulus considering that, unlike the federal government, they (mostly) cannot deficit spend. The funds would allow state programs to meet an increasing need for services as more families meet hard times. The prospects of state aid and Ohio’s job stimulus plan offer hope, and we need to continue to find additional approaches to maintain essential services and Ohio’s economy.